I liked the observation that consensus tends to be out of tutch at extreams, but usually about right when conditions are in the middle. Personally I recall an old saying that when what you expected happends in the market and all looks well, then sell. I tend to hold then and lose some short-time opportunities. So be critical of your self.
I’m not sure I would ever say China doing big stimulus is so out of consensus. The markets ran up last year pretty much based on that assumption and fell when it didn’t materialize and Trump was elected. It’s still off the recent lows.
That’s a good way to frame it. It’s a love it or hate it subject with the latter being more in favor over the last few years.
Maybe the current multiples are too low but we won’t be going back to the pre-2015 multiples even if you don’t buy the Japanification story. The growth expectations have shifted down, leverage is much higher, overbuilt and digesting infrastructure and property and less favorable attitude towards private enterprise and other countries.
Covered this in the Quarterly Pack -- the 2025 surprise or out of consensus view would be that tariffs trigger China to do more stimulus; send their stocks soaring, while a problematic policy mix triggers a deep correction in frothy overvalued US stocks.
Most people will disagree with this idea, and I would say it rubs hard against media/consensus narratives.
I liked the observation that consensus tends to be out of tutch at extreams, but usually about right when conditions are in the middle. Personally I recall an old saying that when what you expected happends in the market and all looks well, then sell. I tend to hold then and lose some short-time opportunities. So be critical of your self.
Indeed, reminds me of 2 quotes:
"failure is always an option"
"this too shall pass"
I’m not sure I would ever say China doing big stimulus is so out of consensus. The markets ran up last year pretty much based on that assumption and fell when it didn’t materialize and Trump was elected. It’s still off the recent lows.
yeah I guess it depends who you ask, but my sense is the prevailing narrative is still one of pessimism and skepticism when it comes to China
That’s a good way to frame it. It’s a love it or hate it subject with the latter being more in favor over the last few years.
Maybe the current multiples are too low but we won’t be going back to the pre-2015 multiples even if you don’t buy the Japanification story. The growth expectations have shifted down, leverage is much higher, overbuilt and digesting infrastructure and property and less favorable attitude towards private enterprise and other countries.
Covered this in the Quarterly Pack -- the 2025 surprise or out of consensus view would be that tariffs trigger China to do more stimulus; send their stocks soaring, while a problematic policy mix triggers a deep correction in frothy overvalued US stocks.
Most people will disagree with this idea, and I would say it rubs hard against media/consensus narratives.
Such bullsh…
which part? happy to hear your considered thoughts/pushback on any of the details or assumptions presented above